Answers
Answer:
C
Explanation:
Related Questions
Pizza Express Inc. began the Year 2 accounting period with $2,500 cash, $1,400 of common stock, and $1,100 of retained earnings. Pizza Express was affected by the following accounting events during Year 2:
1. Purchased $3,600 of supplies on account.
2. Earned and collected $12,300 of cash revenue.
3. Paid $2,700 cash on accounts payable.
4. Adjusted the records to reflect the use of supplies. A physical count indicated that $250 of supplies was still on hand on December 31, Year 2.
Required
a. Show the effects of the events on the financial statements.
b. Explain the difference between the amount of net income and amount of net cash flow from operating activities.
Answers
Answer:
a) I used an excel spreadsheet since there is not enough room here.
b) Net income = $8,950
Cash flows form operating activities =
Net income $8,950
Adjustments to net income:
Increase in account payable $250Net cash from operating activities $9,850
Net income is lower because a company must record revenues and expenses when they happen, not when they are associated with cash flows. This is why a company that makes all credit sales might have a large profit, but a small amount of cash (the opposite of this situation).
The answer is Net income = $8,950
Cash flows from operating activitiesNet income $8,950
Adjustments to net income:
Increase in account payable $250
Net cash from operating activities $9,850
When the Net income is lower because a company must record revenues and also expenses when they happen, and also not when they are associated with cash flows. so This is why a company that makes all credit sales might have a large profit, but a small amount of cash (the opposite of this situation).
Find out more information about Cash flows here:
https://brainly.com/question/26371663
Gitano Products operates a job-order costing system and applies overhead cost to jobs on the basis of direct materials used in production (not on the basis of raw materials purchased). Its predetermined overhead rate was based on a cost formula that estimated $128,800 of manufacturing overhead for an estimated allocation base of $92,000 direct material dollars to be used in production. The company has provided the following data for the just completed year:
Purchase of raw materials $ 136,000
Direct labor cost $ 88,000
Manufacturing overhead costs:
Indirect labor $ 136,100
Property taxes $ 8,200
Depreciation of equipment $ 19,000
Maintenance $ 12,000
Insurance $ 7,400
Rent, building $ 32,000
Beginning Ending
Raw Materials $ 27,000 $ 13,000
Work in Process $ 49,000 $ 37,000
Finished Goods $ 69,000 $ 55,000
Required:
1. Compute the predetermined overhead rate for the year.
2. Compute the amount of underapplied or overapplied overhead for the year.
3. Prepare a schedule of cost of goods manufactured for the year. Assume all raw materials are used in production as direct materials.
4. Compute the unadjusted cost of goods sold for the year. Do not include any underapplied or overapplied overhead in your answer.
5. Assume that the $37,000 ending balance in Work in Process includes $8,000 of direct materials. Given this assumption, supply the information missing below:
Required 1 Required 2 Required 3 Required 4 Required 5
Compute the predetermined overhead rate for the year. 19% redetermined overhead rate
Answers
Answer:
See explanation below as attached.
Explanation:
1. Predetermined overhead is 139% of direct labor hour
2. Under applied overhead is $6,200
Please find attached breakdown and solution to question 1, 2, 3, 4 and 5.
Compute Net Operating Assets Selected balance sheet and income statement information for Home Depot follows.
$ millions Jan. 31, 2016 Feb. 01, 2015
Operating assets $40,583 $38,473
Nonoperating assets 2,241 1,748
Total assets 42,824 40,221
Operating liabilities 15,018 13,527
Nonoperating liabilities 21,340 17,222
Total liabilities 36,358 30,749
Sales 88,944
Net operating profit before tax (NOPBT) 12,024
Nonoperting expense before tax 778
Tax expense 4,208
Net income 7,038
Compute net operating assets for the years ended January 31, 2016 and February 1, 2015.
2016 NOA $Answer
2015 NOA $Answer 0
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Question
Compute Net Operating Assets Selected balance sheet and income statement information for Home Depot follows.
$ millions Jan. 31, 2016 Feb. 01, 2015
Operating assets $40,583 $38,473
Nonoperating assets 2ating liabilities 15,018 1erating liabilities 21,340 17,222
Total liabilities 36,358 30,749
Sales 88,944
Net operating profit before tax (NOPBT) 12,024
Nonoperting expense before tax 778
Tax expense 4,208
Net income 7,038
Compute net operating assets for the years ended January 31, 2016 and February 1, 2015.
2016 NOA $Answer
2015 NO
The Johnson Materials Inc. has an EBIT of $3,500,000. Its Times Interest Earned (TIE) ratio is 5, Profit Margin is 16% and the tax rate is 35%. Costs of Goods Sold (COGS) is $6 million. Develop an income statement by filling in the blanks in the following table:
Sales = _________
COGS = 6000000
EBITDA =
Depreciation & amortization=
EBIT= 3500000
Interest Expense =
EBT =
Tax =
Net Income =
Answers
Answer and Explanation:
The computation of missing amounts is shown below:-
As we know that
Times Interest Earned Ratio = EBIT ÷ Interest Expense
So it can be write as
Interest Expense = EBIT ÷ Times Interest Earned Ratio
= $3,500,000 ÷ 5
= $700,000
Now
EBT is
= EBIT - Interest Expense
= $3,500,000 - $700,000
= $2,800,000
Now
Tax = 35% of EBT
= 0.35 × $2,800,000
= $980,000
After that
Net Income is
= Earning Before Tax - Tax
= $2,800,000 - 980,000
= $1,820,000
Also,
Profit Margin = Net Income ÷ Sales
So it can be written as
Sales = Net Income ÷ Profit Margin
= $1,820,000 ÷ 16%
= $11,375,000
And,
EBITDA = Sales - Cost of Goods Sold
= $11,375,000 - $6,000,000
= $5,375,000
Now
EBIT = EBITDA - Depreciation & Amortization
So, it can be written as
Depreciation & Amortization = EBITDA - EBIT
= $5,375,000 - $3,500,000
= $1,875,000
Prepare adjusting journal entries, as needed, for the following items.
A. The Supplies account shows a balance of $530, but a count of supplies reveals only $280 on hand at year-end.
B. The company initially records the payments of all insurance premiums as prepaid insurance. The unadjusted trial balance at year-end shows a balance of $570 in Prepaid Insurance. A review of insurance policies reveals that $140 of insurance is unexpired.
C. Employees work Monday through Friday, and salaries of $2,900 per week are paid each Friday. The company's year-end falls on Tuesday.
D. At year-end, the company received a utility bill for December's electricity usage of $250 that will be paid in early January.
Answers
Answer:
Explanation:
Journal Entry is the way to record transactions, i.e business transactions into the record of account which is called Journal Book. It involves the identification of those account present in the transaction,know the type of account, then with accounting rule, record the transaction.
CHECK THE ATTACHMENT FOR THE PREPARED JOURNAL
Acton Quest Games Inc. adjust accounts annually. The following information is available for the year ended December 31, 2017.
Purchased a 1-year insurance policy on June 1 for $1,320 cash.
Paid $6,100 on August 31 for 5 months' rent in advance.
On September 4, received $3,240 cash in advance from e corporation to sponsor a game each month for a total of 9 months for the most improved students at local school.
Signed a contract for cleaning services starting December 1 for $1,150 per month. Paid for the first 2 months on November 30. (Hint: use the account Prepaid Cleaning to record
On December S, received $2,600 in advance from a gaming dub. Determined that on December 32, $350 of these games had not yet been played.
Required:
For each of the above transactions, record the adjustment that is required on December 31.
Answers
Answer:
Dec 31
1.
Insurance expense 770 Dr
Prepaid Insurance 770 Cr
2.
Rent Expense 4880 Dr
Prepaid Rent 4880 Cr
3.
Unearned Service Revenue 1440 Dr
Service Revenue 1440 Cr
4.
Cleaning Expense 1150 Dr
Prepaid Cleaning 1150 Cr
5.
Unearned Service Revenue 2250 Dr
Service Revenue 2250 Cr
Explanation:
1.
The insurance policy is for 1 year. The per year expense is = 1320 / 12 = 110
Till December, 7 months of insurance expense will be charged = 110 * 7 = 770
2.
The rent is paid in advance for 5 months till January. Till December, 4 months of rent has been consumed.
Rent expense will be debited by = 6100 / 5 * 4 = 4880
3.
The cash is received in advance for service providing for the 9 months from September. Till December, 4 months of service revenue would have been earned.
Service revenue will be credited by = 3240 / 9 * 4 = 1440
4.
The cash is paid for cleaning service in advance for 2 months till January next year. Till December, one month of service would have been availed so cleaning expense will be debited by $1150 and prepaid cleaning will be credited by $1150
5.
The cash is received in advance for service to be provided. Till the end of December, $2250 (2600 - 350) of service has been provided. So service revenue will be credited by $2250 and unearned service revenue will be debited by $2250
Compare this to Case 16, a case that resulted in a legislative change requested by an advocacy group after a fatal event. In this instance, the family is looking to effect change via the political process. However, this approach is rarely successful. Do you think the concepts of social marketing could be used in this instance or one like it? What are the six basic steps of social marketing?
Answers
Answer:
Yes
Explanation:
Yes, social marketing may be a great idea for a situation such as this one. This is because power comes from awareness and unity. Being able to inform people of the changes you want to be implemented is a great way of getting them on board with your cause. Once this is done it will become much easier to be taken seriously by the government which in term will make it easier for these changes to be considered and implemented. This is all done using the six steps of social marketing which are analyzing, development, designing, testing, implementing, and lastly evaluating.
Microsoft develops, produces, and markets a wide range of computer software, including the Windows operating system. On its recent financial statements, Microsoft reported the following information about net sales revenue and accounts receivable (amounts in millions).
Current Year Prior Year
Accounts receivable, net of allowances of $405 and $426 $19,792 $18,277
Net sales revenue 89,950 85,320
According to its Form 10-K, Microsoft recorded bad debt expense of $14 and there were no bad debt recoveries during the current year.
Required:
What amount of bad debts was written off during the current year?
Answers
Answer:
$106 million
Explanation:
allowance for doubtful accounts
debit credit
beg. balance 426
bad debt 85
ending balance 405
106
Since you need $106 million to balance the account, that should be the amount of bad debt written off during the current year. Allowance for doubtful accounts is a contra asset account, any debit balance increases accounts receivable while a credit balance decreases it.
Lewis Bros. currently has outstanding debt but has decided to issue additional debt for expansion purposes. The pretax cost of the new debt is best estimated at the ________ of the currently outstanding debt.
Answers
Answer: b. current yield to maturity
Explanation:
Interest rates charged on debt are primarily based on the risk of the borrower being able to pay back the debt. The higher the risk, the higher the interest rate charged.
The risk of not paying (default) back the debt is higher when the borrower already has existing debt. This is why in such instances, the interest on the new debt will be based on the yield to maturity (interest rate) of the existing debt so that the risk of default is adequately accounted for.
The prepaid insurance account shows a debit of $6,336, representing the cost of a 2-year fire insurance policy dated August 1 of the current year. 2.
On November 1. Rent Revenue was credited for $1,809, representing revenue
from a subrental for a 3-month period beginning on that date.
3. Purchase of advertising materials for $767 during the year was
recorded in the Advertising Expense account.
On December 31. Advertising materials of $277 are on hand.
4. Interest of $714 has accrued on notes payable. The interest will
be paid in January of the next year.
Instructions:
Prepare the following in general journal form.
A) The adjusting entry for each item.
B) The reversing entry for each item where appropriate.
Answers
Answer and Explanation:
The Journal entries are shown below:-
1. Insurance Expense Dr, $1,320 ($6,336 ÷ 24 × 5)
To Prepaid Insurance $1,320
(Being insurance expense is recorded)
No Reversing Entry required
2. Rental Revenue $603 ($1,809 ÷ 3)
To Deferred Rental Revenue $603
(Being rental revenue is recorded)
Reversing entry in the next year will be:
Deferred Rental Revenue Dr, $603
To Rental Revenue $603
(Being deferred rental revenue is recorded)
3. Advertising Materials Inventory Dr, $277
To Advertising Expense $277
(Being advertising material inventory is recorded)
The reversing entry would be:
Advertising Expense Dr, $277
To Advertising Materials Inventory $277
(Being advertising expense is recorded)
4. Interest Receivable Dr, $714
To Interest Income $714
(Being interest receivable is recorded)
Interest income Dr, $714
To Interest receivable $714
(Being interest income is recorded)
helpp please 10 points!
2. What are Internal and external factors.
Answers
The minimum downside projection from a head and shoulders top pattern is derived a. by projecting downward from the neckline, the vertical distance from the top of the head to the neckline b. by measuring the width of the left shoulder and subtracting that distance from the neckline c. by measuring the distance from the penetration of the neckline by the left shoulder to the penetration of the neckline by the right shoulder and extending down from the point of penetration of the right shoulder d. by estimating the length of the primary price cycle
Answers
Answer:
a. by projecting downward from the neckline, the vertical distance from the top of the head to the neckline
Explanation:
Top pattern of head and shoulders Simple and commonly used pattern by trader in technical analysis. The trader under this model is well aware of what they are looking for. This type of model is available throughout the day, so investors and traders use this model for msking investments. This type of chart provides benefits such as stopping orders for easy trading, price targets and minimizing losses in trading. The minimum negative value from the head and shoulder top pattern is provided below the projection neckline, which is the vertical distance from the top of the head to the neckline.The following terms relate to the fundamental qualities of useful information. Match the key letter of the correct term with the descriptive statement below. a. Confirmatory value b. Faithful representation c. Neutral d. Timely e. Predictive value f. Verifiable g. Relevant 1. Providing information that is not biased toward one position or another. select a letter 2. Providing information before it loses its capacity to influence decisions. select a letter 3. Providing information that is proven to be free from error. select a letter 4. Providing information that would make a difference in a business decision. select a letter 5. Provide information that accurately depicts what really happened. select a letter 6. Providing information that confirms or corrects prior decisions.
Answers
Answer:
1. Providing information that is not biased toward one position or another.
c. NeutralAs an accountant, you cannot prepare, record or select information in order to favor someone's personal interests.
2. Providing information before it loses its capacity to influence decisions.
d. TimelyInformation must be available when it can influence future decisions. E.g. having a 2010 cost report today is useless if you are preparing next year's budget.
3. Providing information that is proven to be free from error.
b. Faithful representationFaithful representation means that information must be accurate, complete, neutral, and free from errors.
4. Providing information that would make a difference in a business decision.
g. RelevantRelevant information should be material and be either predictive or confirmatory.
5. Provide information that accurately depicts what really happened.
b. Faithful representationFaithful representation means that information must be accurate, complete, neutral, and free from errors.
6. Providing information that confirms or corrects prior decisions.
a. Confirmatory valueIt can be used to check, confirm or correct prior reports or evaluations.
What designation would you hold if you have the most common designation in the accounting field, which is also considered the backbone of the accounting function?
Answers
The certification of Public accountant will be held by an employee if he/she has most common designation in the accounting field.
What is a certification of Public accountant?This license are issued to accounting professionals that have an extensive education and has pass a rigorous four-part exam and meet experience.
Hence, the license will be by an employee if he/she has most common designation in the accounting field.
Read more about certification
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The following trial balance of Pronghorn Traveler Corporation does not balance. Pronghorn Traveler Corporation Trial Balance April 30, 2020 Debit Credit Cash $6,632 Accounts Receivable 5,600 Supplies 3,327 Equipment 6,460 Accounts Payable $7,404 Common Stock 8,360 Retained Earnings 2,360 Service Revenue 5,560 Office Expense 4,680 $26,699 $23,684 An examination of the ledger shows these errors.
1. Cash received from a customer on account was recorded (both debit and credit) as $1,940 instead of $2,210.
2. The purchase on account of a computer costing $3,080 was recorded as a debit to Office Expense and a credit to Accounts Payable.
3. Services were performed on account for a client, $2,610, for which Accounts Receivable was debited $2,610 and Service Revenue was credited $585.
4. A payment of $455 for telephone charges was entered as a debit to Office Expense and a debit to Cash.
5. The Service Revenue account was totaled at $5,560 instead of $5,640.
Answers
Answer:
adjusting entries:
1. Cash received from a customer on account was recorded (both debit and credit) as $1,940 instead of $2,210.
Dr Cash 270
Cr Accounts receivable 270
2. The purchase on account of a computer costing $3,080 was recorded as a debit to Office Expense and a credit to Accounts Payable.
Dr Equipment 3,080
Cr Office expense 3,080
3. Services were performed on account for a client, $2,610, for which Accounts Receivable was debited $2,610 and Service Revenue was credited $585.
Dr Accounts receivable 0
Cr Service revenue 2,025
4. A payment of $455 for telephone charges was entered as a debit to Office Expense and a debit to Cash.
Dr Office expense 0
Cr Cash 910
5. The Service Revenue account was totaled at $5,560 instead of $5,640.
Cr Service revenue 80
the adjusted trial balance should be:
Debit Credit
Cash $5,992
Accounts Receivable $5,330
Supplies $3,327
Equipment $9,540
Accounts Payable $7,404
Common Stock $8,360
Retained Earnings $2,360
Service Revenue $7,665
Office Expense $1,600
Totals $25,789 $25,789
Forest Components makes aircraft parts. The following transactions occurred in July.
1. Purchased $119,000 of materials on account.
2. Issued $117,600 in direct materials to the production department.
3. Issued $8,400 of supplies from the materials inventory.
4. Direct labor employees earned $217,000, which was paid in cash.
5. Purchased miscellaneous items for the manufacturing plant for $120,400 on account.
6. Recognized depreciation on manufacturing plant of $245,000.
7. Applied manufacturing overhead for the month.
8. Job X that cost $533,000 was completed.
9. Some units in Job X, that cost $521,500, were sold for $800,000 cash.
10. After all of the previous transactions posted, the Manufacturing overhead control account shows a debit balance of $373,800, and the Applied manufacturing overhead account shows a credit balance of $201,800. The over- or under-applied overhead was closed to Cost of goods sold. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $3,000,000. Estimated overhead for the year was $2,790,000.
Required:
a. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
b. Prepare journal entries to record these transactions.
Answers
Answer and Explanation:
Answer and explanation attached
Beginning raw materials = ending raw materials +raw materials for production+issued raw materials- raw materials purchased -raw materials returned from production= $79800
Cost of goods manufactured =ending finished goods+cost of goods sold -beginning finished goods= $553000
Beginning work in progress inventory=
Ending work in progress + cost of goods manufactured + materials returned - manufacturing overhead applied- issued raw materials-direct labour wages =$105490
Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31.
Additional Information:
1. An analysis of WTI's insurance policies shows that $2,542 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,204 are available at year-end.
3. Annual depreciation on the equipment is $10,170.
4. Annual depreciation on the professional library is $5,085.
5. On September 1, WTI agreed to do five courses for a client for $2,400 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $12,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $6,498 of the tuition has been earned by WTI.
7. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.
Debit Credit
Cash $26,944
Accounts receivable 0
Teaching supplies 10,362
Prepaid insurance 15,545
Prepaid rent 2,073
Professional library 31,088
Accumulated depreciation—Professional library $9,328
Equipment 72,533
Accumulated depreciation—Equipment 16,582
Accounts payable 37,202
Salaries payable 0
Unearned training fees 11,500
Common stock 11,000
Retained earnings, December 31, 2017 54,908
Dividends 41,452
Tuition fees earned 105,701
Training fees earned 39,379
Depreciation expense—Professional library 0
Depreciation expense—Equipment 0
Salaries expense 49,743
Insurance expense 0
Rent expense 22,803
Teaching supplies expense 0
Advertising expense 7,254
Utilities expense 5,803
Totals $285,600 $285,600
Required:
a. Prepare Wells Technical Institute's income statement for the year 2018.
b. Prepare Wells Technical Institute's statement of retained earnings for the year 2018.
c. Prepare Wells Technical Institute's balance sheet as of December 31, 2018.
Answers
Answer:
1. An analysis of WTI's insurance policies shows that $2,542 of coverage has expired.
Dr Insurance expense 2,542
Cr Prepaid insurance 2,542
2. An inventory count shows that teaching supplies costing $2,204 are available at year-end.
Dr Teaching supplies expense 8,158
Cr Teaching supplies 8,158
3. Annual depreciation on the equipment is $10,170.
Dr Depreciation expense 10,170
Cr Accumulated depreciation: equipment 10,170
4. Annual depreciation on the professional library is $5,085.
Dr Depreciation expense 5,085
Cr Accumulated depreciation: professional library 5,085
5. On September 1, WTI agreed to do five courses for a client for $2,400 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $12,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees.
Dr Unearned training fees 4,800
Cr Training fees earned 4,800
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $6,498 of the tuition has been earned by WTI.
Dr Accounts receivable 6,498
Cr Tuition fees earned 6,498
7. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
Dr Salaries expense 400
Cr Salaries payable 400
8. The balance in the Prepaid Rent account represents rent for December.
Dr Rent expense 2,073
Cr Prepaid rent 2,073
Wells Technical Institute (WTI)
Adjusted Trial Balance
Debit Credit
Cash $26,944
Accounts receivable $6,498
Prepaid rent $0
Teaching supplies $2,204
Prepaid insurance $13,003
Professional library $31,088
Accumulated depreciation: $14,413
Professional library
Equipment $72,533
Accumulated depreciation: $26,752
Equipment
Accounts payable $37,202
Salaries payable $400
Unearned training fees $6,700
Common stock $11,000
Retained earnings $54,908
Dividends $41,452
Tuition fees earned $112,199
Training fees earned $44,179
Depreciation expense: $5,085
Professional library
Depreciation expense: $10,170
Equipment
Salaries expense $50,143
Insurance expense $2,542
Rent expense $24,876
Teaching supplies expense $8,158
Advertising expense $7,254
Utilities expense $5,803
Totals $307,753 $307,753
a) Wells Technical Institute (WTI)
Income Statement
For the year ended December 31, 2018
Revenue:
Tuition fees earned $112,199 Training fees earned $44,179 $156,378Operating expenses:
Depreciation expense $15,255 Salaries expense $50,143 Insurance expense $2,542 Rent expense $24,876 Teaching supplies expense $8,158 Advertising expense $7,254 Utilities expense $5,803 ($114,031)Operating income $42,347
b)Wells Technical Institute (WTI)
Balance Sheet
For the year ended December 31, 2018
Assets:
Cash $26,944
Accounts receivable $6,498
Teaching supplies $2,204
Prepaid insurance $13,003
Professional library, net $16,675
Equipment, net $45,781
Total assets $111,105
Liabilities:
Accounts payable $37,202
Salaries payable $400
Unearned training fees $6,700
Total liabilities $44,302
Stockholders' Equity:
Common stock $11,000
Retained earnings $55,803
Total stockholders' Equity $66,803
Total liabilities and equity $111,105
c)Wells Technical Institute (WTI)
Statement of Retained Earnings
For the year ended December 31, 2018
Beginning balance January 1, 2018 $54,908
Net income $42,347
Subtotal $97,255
Dividends ($41,452 )
Ending balance December 31, 2018 $66,803
Amazon.com, Inc., headquartered in Seattle, WA, started its electronic commerce business in 1995 and expanded rapidly. The following transactions occurred during a recent year (dollars in millions):
Issued stock for $6 cash.
Purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account.
Paid $513 in principal and $91 in interest expense on long-term debt.
Earned $88,988 in sales revenue; collected $87,949 in cash with the customers owing the rest on account.
Incurred $10,766 in shipping expenses, all on credit.
Paid $28,241 cash on accounts owed to suppliers.
Incurred $4,332 in marketing expenses; paid cash.
Collected $620 in cash from customers paying on account.
Borrowed $6,359 in cash as long-term debt.
Used inventory costing $62,752 when sold to customers. Paid $177 in income tax recorded as an expense in the prior year.
For each of the transactions, indicate the effects (positive value for increase, negative value for decrease, and leave blank if no effect) on Income Statement and Balance Sheet.
Answers
Answer:
Please see below
Explanation:
1. Issue stock for $6 cash.
•Assets increase by $6
•Stockholder's equity increase by $6
2. Purchase equipment costing $6,320, paying $4,893 in cash and charging the rest on account
•Asset will increase by $6,320 (equipment)
•Assets decrease by $4,893 (cash)
•Hence net assets increase by $1,427
•Liabilities increase by $1,427 I.e The amount that was paid on account.
3. Paid $513 in principal and $91 in interest expense on long term debt
•Liabilities decrease by $604
4. Earned $88,988 in sales revenue;
Collected $87,949 in cash with the customers owing the rest on account
• Revenue increase by $88,988
• Assets increase by $87,949
5. Incurred $10,766 in shipping expenses, all on credit
• Expenses increases by $10,766
• Liabilities increases by $10,766
6. Paid $28,241 cash on accounts owned to suppliers
• Assets decrease by $28,241
• Liabilities decrease by $28,241
7. Incurred $4,332 in marketing expenses; paid cash
• Expenses increase by $4,332
• Assets decrease by $4,332
8. Collected $620 in cash from customers paying on account.
• Assets increase by $620
9. Borrowed $6,359 in cash as long term debt
• Assets increase by $6,359
• Liabilities increase by $6,359
10. Used inventory costing $62,752 when sold to customers
• Assets decrease by $62,752
11. Paid $177 in once tax recorded as an expense in the prior year
• liabilities decrease by $177
Digger Inc. sells a high-speed retrieval system for mining information. It provides the following information for the year.
Budgeted Actual Overhead cost $975,000 $950,000
Machine hours 50,000 45,000
Direct labor hours 100,000 92,000
Overhead is applied on the basis of direct labor hours.
A) Compute the predetermined overhead rate. (Round answer to 2 decimal places, e.g. 12.25.) Pre-determined overhead rate = budgeted overhead / budgeted direct labor hours
= 975,000 / 100,000
= $9.75 per direct labor hoursB) Determine the amount of overhead applied for the year.?overhead applied = actual hours *overhead rate = 92000 * 9.75
= $897,000C) Explain how an activity-based costing system might differ in terms of computing a predetermined overhead rate.
Answers
Answer:
A. $9.75 per direct labor hours
B.$897,000
C. Activity-based costing which is a costing system or costing method tend to have more activities than predetermined overhead.
Explanation:
A) Computation for the predetermined overhead rate
Using this formula
Pre-determined overhead rate = budgeted overhead / budgeted direct labor hours
Let plug in the formula
Pre-determined overhead rate = 975,000 / 100,000
Pre-determined overhead rate = $9.75 per direct labor hours
Therefore Pre-determined overhead rate is $9.75 per direct labor hours
B) Calculation to Determine the amount of overhead applied
Using this formula
Overhead applied = actual hours *overhead rate
Let plug in the formula
Overhead applied = 92,000 * 9.75
Overhead applied = $897,000
Therefore the Overhead applied is $897,000
C) ACTIVITY BASED costing system differ when computing a predetermined overhead in the following ways:
Activity-based costing which is a costing system or costing method tend to have more activities than predetermined overhead and such activities include:
Number of machine hours
Cost drivers such as machine set among others.
Chicago's Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the linens contract requires a 2-day lead time. The hotel expects a 98% service level to satisfy high guest expectations.
Required:
a. What is the reorder point?
b. What is the safety stock?
c. What is the ROP?
Answers
Answer:
1. Reorder point = 2,290 towels
2. Safety shock = 290 towels
Explanation:
1. Reorder Point
ROP = (Average daily demand * Lead time in days) + Z*б(dlt)
Z= No of SD depending on the service level of 98%
б(dlt) = SD in demand during the lead time
We derive б(dlt) given the SD in demand б(d) = 100 towels/day using the formula
б(dlt) = б(d) *[tex]\sqrt{ Lead time}[/tex] .................(2)
Where the lead time = 2 days
Substitute in equation 2, the value of б(d) = 100 towels/day and Lead time = 2 days to obtain
б(dlt) = 100 * [tex]\sqrt{2}[/tex]
б(dlt) = 100 * 1.4142
б(dlt) = 141.42 towels
Substitute in equation (1), Z = 2.05 for a service level of 98%
Average daily demand = 1,000 towels, Lead time = 2 days, б(dlt) = 141.42 towels to obtain
ROP = (1,000 * 2) + 2.05*141.42
ROP = 2,290 towels
b. Safety shock
The safety shock = Z * б(dlt)
Substitute the value of Z = 2.05 and б(dlt) = 141.42 towels to obtain
The safety shock = 2.05 * 141.42
The safety shock = 290 towels
Belden, Inc. acquires 30 percent of the outstanding voting shares of Sheffield, Inc. on January 1, 2017, for $320,000, which gives Belden the ability to significantly influence Sheffield. Sheffield has a net book value of $828,000 at January 1, 2017. Sheffield's asset and liability accounts showed carrying amounts considered equal to fair values except for a copyright whose value accounted for Belden's excess cost over book value in its 30 percent purchase. The copyright had a remaining life of 16 years at January 1, 2017. No goodwill resulted from Belden's share purchase.
Sheffield reported net income of $180,000 in 2017 and S230,000 of net income during 2018. Dividends of $70,000 and $80,000 are declared and paid in 2017 and 2018, respectively. Belden uses the equity method.
a. On its 2018 comparative income statements, how much income would Belden report for 2017 and 2018 in connection with the company's investment in Sheffield?
b. If Belden sells its entire investment in Sheffield on January 1, 2019, for S400,000 cash, what is the impact on Belden's income?
c. Assume that Belden sells inventory to Sheffield during 2017 and 2018 as follows:
Year Cost to Belden Price to Sheffield Year-End Balance (at Transfer Price)
2017 $29,700 $54,000 $18,000 (sold in following year)
2018 29,500 59,000 40,000 (sold in following year)
d. What amount of equity income should Belden recognize for the year 2018?
Answers
Answer:
Please answers below
Explanation:
1. a Equity income in 2017 = $49,525
b. Equity income in 2018 = $64,525
2. Gain on sale of investment = $10,950
3. Equity income in 2018 = $60,955
Kindly find attached breakdown of the answers above.
Consider an economy that is composed of identical individuals who live for two periods. These individuals have preferences over consumption in periods 1 and 2 given by U = ln(C1) + ln(C2). They receive an income of 100 in period 1 and an income of 50 in period 2. They can save as much of their income as they like in bank accounts, earning an interest rate of 10% per period. They do not care about their children, so they spend all their money before the end of period 2.
Each individual’s lifetime budget constraint is given by C1 + C2/(1 + r) = Y1 + Y2/(1 + r). Individuals choose consumption in each period by maximizing lifetime utility subject to this lifetime budget constraint.
What is the individual’s optimal consumption in each period? How much saving does he or she do in the first period?
Now the government decides to set up a social security system. This system will take $10 from each individual in the first period, put it in the bank, and transfer it to him or her with interest in the second period. Write out the new lifetime budget constraint. How does the system affect the amount of private savings? How does the system affect national savings (total savings in society)? What is the name for this type of social security system?
Answers
Explanation:
we calculate lifetime income,
= 100 + 50 = 150
individual consumes income in periods c1 and c2 and interest rate on savings is 10%,
we define the consumption basket;
c1 = 100
c2 = 50
i = 10% = 0.1
c1 + c2/(1+i) = y1 + y2/(1+i) = 100 + 50/1.1 = 100+45.45 = 145.45
c2 = (145.45 - c1) x 1.1
we have MUc1 = 1/c1
and MUc2 = 1/c2
we have to equate the ratio of marginal utilities with the prices of consumption of periods c1 and c2
c2/c1 = 1+i = 1.1
c2 = 1.1 x c1 ............ (2)
we have to put c2 into c1, we get
1.1 x c1 = (145.45 - c1) x 1.1
1.1c1 = (145.45- c1)1.1
divide through by 1.1
c1 = 145.45 - c1
c1+c1 = 145.45
2c1 = 145.45
to get value of c1;
c1 = 145.45/2 = 72.73
since c1 is known
c2 = 1.1 x 72.73 = 80
b. if government takes $10 from period 1 and add it to the income of a consumer in period 2, we then have income of individual to be;
Y1 = 100-10 = 90
Y2 = 50 + 10 + (10% of 10)
10%x10 = 1,
y2 = 60+1 = 61
c1 + c2/1.1 = 90 + (61/1.1)
= 90 + 55.45
= 145.45
c2 = (145.45 - c1) x 1.1
equilibrium values will be unchanged, apart fro the fact that $10 is a compulsry savings of an individual therefore private savings falls
100 - 72.73-10 = 17.27
This type of savings is called as Providend fund
The following transactions pertain to year 1, the first-year operations of Campbell Company. All inventory was started and completed during year 1. Assume that all transactions are cash transactions.
Acquired $4,700 cash by issuing common stock.
Paid $630 for materials used to produce inventory.
Paid $1,940 to production workers.
Paid $1,210 rental fee for production equipment.
Paid $120 to administrative employees.
Paid $116 rental fee for administrative office equipment.
Produced 360 units of inventory of which 260 units were sold at a price of $13 each.
RequiredPrepare an income statement and a balance sheet in accordance with GAAP.
Answers
Answer:
a. In the income statement, Net Income = $414
b. In the balance sheet, Total assets = Total equities and liabilities = $5,114.
Explanation:
Note: See the attached excel file for the income statement and a balance sheet.
An income statement prepared in accordance with the generally accepted accounting principles (GAAP) records income when they are earned and expenses when they are uncured.
A balance sheet prepared in accordance with the generally accepted accounting principles (GAAP) shows assets in order of liquidity. In the prepared balance sheet, current asset starting with the ending cash balance which is the most liquid asset asset is shown first followed by others in there order of liquidity.
The fact that Total assets = Total equities and liabilities = $5,114 in the attached excel file shows the balance sheet is accurately prepared.
In the attached excel file, we have:
Sales revenues = Units sold * Unit price = 260 * $13 = $3,380
Ending finished goods Inventory = Total cost of production * ((Units produced - Units sold) / Units produced) = $3,780 * ((360 - 260) / 360) = (100/360)) = $1,050
Below the income statement and the balance sheet in the attached excel file, there is a working that shows the ending cash balance of $4,064.
Recording sales, purchases, shipping, and returns—buyer and seller LO P1, P2
Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions.
May
11 Sydney accepts delivery of $29,500 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $19,765. Sydney pays $590 cash to Express Shipping for delivery charges on the merchandise.
12 Sydney returns $1,200 of the $29,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $804.
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
(Both Sydney and Troy use a perpetual inventory system and the gross method.)
1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answers
Answer:
Sydney Retailing (buyer) and Troy Wholesalers (seller)
Sydney Retailing Records:
May 11:
Debit Inventory $29,500
Credit Troy (Accounts Payable) $29,500
To record the purchase of merchandise, terms 3/10, n/90, FOB shipping point.
Debit Freight-in on Inventory $590
Credit Cash Account $590
To record the payment of freight.
May 12
Debit Troy (Accounts Payable) $1,200
Credit Inventory $1,200
To record the return of goods to Troy,
May 20:
Debit Troy (Accounts Payable) $28,300
Credit Cash Account $28,300
To record the payment to Troy on account.
Troy Wholesalers Records:
May 11:
Debit Sydney Retailing (Accounts Receivable) $29,500
Credit Sales Revenue $29,500
To record the sale of merchandise, terms 3/10, n/90, FOB shipping point.
Debit Cost of Goods Sold $19,765
Credit Inventory $19,765
To record the cost of goods sold.
May 12
Debit Sales Returns $1,200
Credit Sydney Retailing (Accounts Receivable) $1,200
To record the return of goods.
Debit Inventory $804
Credit Cost of Goods Sold $804
To record the return of goods.
May 20:
Debit Cash Account $28,300
Credit Sydney Retailing (Accounts Receivable) $28,300
To record the receipt of cash on account.
Explanation:
The records kept by Sydney (the buyer) and Troy (the seller) look alike in some ways but are recorded in opposite directions. However, there are minor differences that reflect the cost effects of goods and financial value exchanging hands between the two trading parties.
Use the following items to determine the total assets, total liabilities, net worth, total cash inflows, and total cash outflows. Rent for the month $ 1,360 Monthly take-home salary $ 3,260 Cash in checking account $ 1,270 Savings account balance $ 1,990 Spending for food $ 560 Balance of educational loan $ 2,390 Current value of automobile $ 8,530 Telephone bill paid for month $ 94 Credit card balance $ 334 Loan payment $ 147 Auto insurance $ 326 Household possessions $ 3,970 Stereo equipment $ 2,590 Payment for electricity $ 166 Lunches/parking at work $ 181 Donations $ 122 Home computer $ 2,140 Value of stock investment $ 1,810 Clothing purchase $ 137 Restaurant spending $ 167 Total assets $ Total liabilities $ Net worth $ Total cash inflows $ Total cash outflows $
Answers
Answer:
Cash inflows = $3,260
Cash outflows = $3,260
Total assets = $22,300
Total liabilities = $2,724
Net worth = $19,576
Explanation:
Cash inflows = Monthly take-home salary $3,260
Cash outflows = Rent for the month $1,360 + Spending for food $560 + Telephone bill paid for month $94 + Loan payment $147 + Auto insurance $326 + Payment for electricity $166 + Lunches/parking at work $181 + Donations $122 + Clothing purchase $137 + Restaurant spending $167 = $3,260
Total assets = Cash in checking account $1,270 + Savings account balance $1,990 + Current value of automobile $8,530 + Household possessions $3,970 + Stereo equipment $2,590 + Home computer $2,140 + Value of stock investment $1,810 = $22,300
Total liabilities = Balance of educational loan $2,390 + Credit card balance $334 = $2,724
Net worth = $22,300 - $2,724 = $19,576
SNC has its own, modest internet-based business. However, the company has been approached by Golden Years Nutraceuticals, a much larger online distributor of third-party brands with connections to a national healthcare website endorsed by a leading senior advocacy association. Therefore, Golden Years reaches a large-and increasing-consumer base of older Americans. This opportunity would generate an additional 10% increase in sales in 2016, followed by increases of 5% in 2017 and 3% in 2018. Increasing the percentage of SNC's business that is conducted online would decrease DSO, because internet sales are collected very quickly. Accounts receivable would decrease by 7 days in the first year and by an additional 3 days in 2017, for a total improvement of 10 days. In 2018, the DSO would decline by another 2 days-in effect, 12 days lower than at the start of 2016. Going forward, the DSO would stay at this lower level and SNC's profit margin would remain unchanged. What would you like to do about this opportunity?
Accept or Decline
2016 2017 2018 Post 2018
Incremental Summary Income Statement ($ in thousands)
Change in Sales $1,600 $2,480 $3,034 $3,034
Change in Cost of Sales $1,492 $2,313 $2,830 $2,830
Change in EBIT $108 $167 $204 $204
Incremental Balance Sheet ($ in thousands)
Change in Accounts Receivable $145 $241 $289 $289
Change in Inventories $368 $570 $698 $698
Change in Accounts Payable $162 $251 $307 $307
Answers
Please find question attached
Answer and Explanation:
Find full answer and explanation attached
An employee's skills is provided to businesses in which market in the circular flow
model?
Answers
Answer:
wyholesale marklet
Explanation:
Presented below are selected accounts for Sheffield Company as reported in the worksheet at the end of May 2020.
Complete the worksheet by extending amounts reported in the adjusted trial balance to the appropriate columns in the worksheet.
Accounts Adjusted Trial Balance Income Statement Balance Sheet
Dr. Cr. Dr. Cr. Dr. Cr.
Cash 8,800
Inventory 77,750
Sales Revenue 446,000
Sales Returns and
Allowances 9,210
Sales Discounts 4,730
Cost of Goods Sold 243,700
Answers
Answer:
Accounts Adjusted T-Balance Income Statement Balance Sheet
Debit Credit Debit Credit Debit Credit
Cash $8,800 $8,800
Inventory $77,750 $77,750
Sales Revenue $446,000 $446,000
Sales Returns $9,210 $9,210
and Allowances
Sales Discounts $4,730 $4,730
Cost of Goods $243,700 $243,700
Sold
Prepare the journal entries to record the following transactions on Sunland Company's books using a perpetual inventory system.
a. On March 2, Splish Brothers Company sold $885,600 of merchandise to Sunland Company on account, terms 2/10, n/30. The cost of the merchandise sold was $519,500.
b. On March 6, Sunland Company returned $110,200 of the merchandise purchased on March 2. The cost of the merchandise returned was $63,000.
c. On March 12, Splish Brothers Company received the balance due from Sunland Company.
Answers
Answer:
a. March 2, 202x, merchandise purchased on account from Splish Brothers, credit terms 2/10, n/30
Dr Merchandise inventory 885,600
Cr Accounts payable 885,600
b. March 6, 202x, defective/wrong merchandise returned to Splish Brothers
Dr Accounts payable 110,200
Cr Merchandise inventory 110,200
c. March 12, 202x, paid invoice to Splish Brothers within discount term
Dr Accounts payable 775,400
Cr Cash 759,892
Cr Purchase discounts 15,508
purchase discount = purchase balance x 2% = $775,400 x 2% = $15,508
Pasadena Candle Inc. budgeted production of 715,000 candles for the January. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 18,600 pounds. The desired January 31 wax inventory is 12,800 pounds. If candle wax costs $2.10 per pound, determine the direct materials purchases budget for January. (One pound = 16 ounces.) Round all computed answers to the nearest whole number. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Answers
Answer:
Purchases Quantity = 441075 pounds
Purchases Value = $926257.5
Explanation:
To calculate the quantity and value of the purchases of direct material for the month of January, we first need to determine the quantity of direct material needed for production in January and adjust it with the opening inventory of direct material and the desired closing inventory.
To produce 715000 candles, the wax needed (in pounds) = 715000 * 10/16
To produce 715000 candles, the wax needed (in pounds) = 446875 pounds
The purchases for wax in pounds for January should be,
Consumption = Opening Inventory + Purchases - Closing Inventory
446875 = 18600 + Purchases - 12800
446875 + 12800 - 18600 = Purchases
Purchases = 441075 pounds
The value of Purchases will be = 441075 * 2.1 = $926257.5